This paper discusses and analyzes the development of women’s role in the modern society, which is, unfortunately, still characterized by the prejudice and discrimination of females, especially in the workplace.

The economic cost of being female is that women, on average, earn less than men do. To be precise, that part of the gender pay gap that cannot be explained by relevant factors is the economy. Since the economic results of male/female work is difficult to measure and is rarely measured, this paper uses the whole gap as a proxy for the unfair part of the gap. A large part of the difference is due to discrimination against women in the labor market and in the workplace. Labor market discrimination occurs when an individual’s employment or pay is based on arbitrary factors irrelevant to job performance.

Historical background

While the number and percentage of women who work for pay have been increasing for over a hundred years, this phenomenon accelerated greatly after World War II. By the end of the 1970s, a majority of women were in the workplace. Economists at the Urban Institute such as Ralph Smith, Nancy Barrett, and Nancy Gordon called this the “subtle revolution: women at work” in their 1979 book of that name. Barbara Bergmann, professor of economics, has called this “the economic emergence of women” in her 1985 book of that name. In the 1970s, working women went from being a minority to a majority of women. In 1970, 42 percent of women worked for pay; in 1980, 51 percent of women were in the labor force (Hartman, 1987) As of 1978, 35 million women were in the labor force, or over 50 percent of women in the population. As of 1991, 57 million American women were in the labor force, or 57 percent of all women of working age. This rate of participation is growing into the 21-st century.
Why Did Women Go to Work?

There are several reasons for the entry of women into the workforce. Some of these reasons are economic (Hartman, 1987). The main reason, according to Barbara Bergmann, is that real wages rose because of industrialization, and it became more valuable for women to work for a wage than to stay home and serve the family. This is an important fact to note because politicians and the media tend to obfuscate the underlying economics of women’s behavior in favor of cultural and psychological explanations. (Women’s Bureau, 1994) Women went to work because they needed money: either they had no husband, an unemployed husband, or a low-wage earner husband. (Sorensen, 2003) The growth of white-collar and service jobs that did not require brute strength made more jobs available to women. (Goldin, 2004)
Why do mothers work for pay? In a study prepared by the Joint Economic Committee, 71 percent of working mothers with children at home reported that they worked to support the family, 4 percent said it was to support themselves, 9 percent wanted extra money, 5 percent said it was interesting, and 11 percent said it was a combination of motives. Thus magazine articles about women giving up their jobs to take care of the children are describing the exceptions, not the rule. The fact is that these days, most families cannot survive without the wife’s paycheck. If it had not been for wives going to work, the standard of living of most working Americans would have declined. Wives went to work and continue to work to maintain the standard of living for their families. This remains true in the 21-st century (Sorensen, 2003).

Women and the modern society analysis

Two forms of discrimination should be distinguished: Statistical discrimination, like prejudice, is judging an individual on the basis of the average characteristics of the group to which the individual belongs. An employer refuses to train a woman worker because, on average, women workers drop out of the labor force to have children, and thus the employer will not get a return on his investment. But many women today do not have children, and thus are being discriminated against statistically. (Reskin et al., 2002)

Taste discrimination occurs when members of one group simply do not like members of another group. Employers may not like women and will refuse to hire them unless they can pay them less. Employers can save money by under-employing women, that is, by not promoting them. The other employees may not like to have women around and certainly not as supervisors; so they may demand a wage premium to work with women. Customers may not want to buy machinery and equipment from women, and they let their suppliers know. Or customers may not want to buy cars from women. This theory sees discrimination as personal prejudice, not as a structural problem. Economist Gary Becker (1971) wrote The Economics of Discrimination, the first treatise on this form of discrimination, and claims that this form of discrimination–taste discrimination–is all that exists. It is a theory of the economics of discrimination. We believe, however, that this theory is only a partial explanation of discrimination. For us, gender discrimination is more complex and not merely a personal prejudice. It is a systematic part of our economy and society.

How do we know when discrimination has occurred? How do we measure it? One way to measure discrimination in earnings is to try to explain as much of the gender gap in pay as one possibly can, using characteristics of people that make them productive, and thus worthy of earning pay. And then what cannot be explained is called discrimination in the labor market. If we took the earnings of all the men and the earnings of all the women in America and averaged each of them, we would find the gender gap. The Women’s Bureau reports that in 1992 the median earnings of a year-round, full-time woman worker was $21,440 and for a man worker it was $30,358 (Reskin et al., 2002). Thus women, on average, make about 71 percent of what men make. If men are more educated, more experienced, and have more tenure with their current employer, then it is legitimate for them to make more than women because they are likely to be more productive. That is what we pay for in our market economy. This is called the human capital theory and is a view widely held by economists. The reasons why men are more educated, experienced, and so on, may be illegitimate, but that would be due to socialization, not discrimination in the marketplace.

Through standard statistical techniques, we can control for the years of education, experience, job tenure, and other factors that are relevant to productivity. If, after we do this, we still find a gender gap in earnings, then many economists claim that this residual in the gap is due to discrimination: women are paid less simply because they are women. A classic study by Mary Corcoran and Greg Duncan (1979) shows that less than half of the gender gap can be explained by factors relevant to productivity, and this suggests the existence of discrimination. Francine Blau and Andrea Beller (1985), in their study on the gender earnings gap, find that men’s jobs pay more than women’s jobs; they define a male job as one that contains 70 percent or more male employees, and they consider jobs with 41 to 69 percent males as integrated jobs. Occupational segregation is the most important cause of the gender gap in pay.
Why do women’s jobs pay less than men’s jobs? Barbara Bergmann (1986) proposes a “crowding theory” to explain why (p. 23). She argues that men and women don’t really compete in the same labor market. There is a market for men’s labor, where the high-paying jobs are. Women are excluded from this market, leaving a scarcity of labor and thus high wages for men. The market for women’s labor is low-paying and overcrowded because all the women are segregated there.

June O’Neill (1990) finds discrimination against childless women. All else equal, childless female workers earn 10 cents less for each male dollar earned by childless male workers. However, the discrimination against working mothers is even greater. The cost of being female if one has children is 33 cents for each dollar a man earns. This appears to be a case of discrimination against mothers, a sort of generalized “Mommy Track” bias. (O’Neil, 1990, p. 92) Adelman (1992) found that among a large sample of people in their thirties, men earned on average $25,000 in 1985, women with no children made $19,000, and women with children $15,000 (O’Neil, 1990). Alan Blinder (1973) has developed another technique for estimating discrimination. This technique looks at the returns to productivity characteristics and, again, is based on the human capital model of earnings. Yes, men may earn more because they have more years of education; but are women being rewarded for each year of education at the same rate as men? Is there gender discrimination in the rewards to education, experience, tenure, and the like?

There are 6 million women in management positions. Increasing numbers of women have entered business in recent years. Since 1978, there has been a rapid rise in the percentage of managers who are women (from 27 percent in 1978 to 39 percent in 1988) (AAA). Despite their increasing numbers, women are still relegated to traditionally female areas like personnel (now called human resource development), community relations, or public relations. They are excluded from financial analysis and manufacturing. Women are placed in staff positions, and men are placed in line positions. Staff positions do not have much chance of promotion, whereas line positions lead to higher ranks. Before women hit their heads against the glass ceiling, they face glass walls that keep them from moving laterally and getting the broad experience they need to move up later.

When corporations are faced with charges of gender discrimination, they usually give several reasons for treating women differently than men. Basically, corporations think that women will drop out and raise children; therefore, they don’t put them into training programs for top positions. They also say that women can’t travel overseas due to family responsibilities, and this hurts their advancement. It’s the old story that women put family before work and thus don’t give their all to the company. Perhaps this was true in the past, but with women marrying later, having fewer children, and obtaining more MBAs, this is an outdated stereotype (Feminist Majority Foundation, 2003).


Many women are stuck in jobs as sales clerks. There are 1.3 million of them. Again, this kind of work does not require a high school diploma, so it pays very little. Forty-seven percent of sales jobs are held by women: 1.7 million men and 1.6 million women hold sales jobs (Fuchs, 1988). But it must be noted that women sell different things than men. Men sell expensive items, like cars, often on commission, whereas women sell everyday things like dishes for a salary. The good news is that the service sector of the economy is growing, and this means increasing employment opportunities for women. But the kinds of jobs that women get in the service sector are often temporary, part-time, and low paying. The new jobs are in health, child care, elder care–all the things that women have traditionally done. They are undervalued in our society, and thus when they become paid jobs, they pay very little.

In sum, women now account for nearly half the labor force, but they still are not paid fairly, and they are kept out of the high-paying, high status occupations and jobs. The majority of women work in lower-level jobs. The bad news is that a woman might loose her job as inspector of construction sites in the city and could be reassigned to manage female clerical workers in the office. The good news is that many women are making inroads into formerly ‘male’ occupations. For instance, Debbie who broke the glass ceiling and landed a managerial position even though she has no college education. There are women who squeeze through the steel door normally closed to women and become letter carriers, police officers and, airline pilots. We celebrate these women as pioneers in lowering the cost of being female.


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